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Risk Management

Business

Quiz 17 :

Life Cycle Financial Risks

Quiz 17 :

Life Cycle Financial Risks

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Compounding can have a significant effect if the principle amount is huge, despite a short savings period.
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True False
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False

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In terms of the financial threats and ignoring the very real psychological and emotional elements, the risk of old age is mainly borne by the dependents of the person.
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True False
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False

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Like the mortality and longevity cases, we have health and disability tables from which the relevant probabilities can be derived.
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True False
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False

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During the development phase of a country, birth rates and fertility rates decline, but at a much slower pace than mortality rates.
True False
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Select tables are used to make mortality calculations without the selection effects of medical examination.
True False
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Income growth and inflation has the opposite effect compared to discounting.
True False
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High interest rates means that the retirement of most people will be financed mainly by the direct contribution by employers, employees, and the government, and only a relatively small part will be financed by interest accumulation.
True False
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Interest rates can be ignored in retirement plans because it is spread over a relatively long period.
True False
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Females are the biologically more resilient than males.
True False
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World Health Organization (WHO) statistics show a negative correlation between the development level of the economy and the percentage of gross domestic product (GDP) spent on health-related costs.
True False
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Life tables and mortality tables are constructed for basic purposes and for the reference of all industries in an economy; therefore, they are based on general populations.
True False
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The life expectancy of females at birth is typically lesser than that of males.
True False
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A high proportion of retired people will live far longer than the assumed life expectancy.
True False
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A substantial part of the years lost due to poor health occurs during the retirement period.
True False
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The present value of a future stream of earnings is affected by interest rates and by time.
True False
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Factors like inflation or a continuous increase in the standard of living operate in the opposite direction to the incoming interest rate.
True False
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The present value at 6 percent interest rate would be higher than the present value at 3 percent interest rate for the same person.
True False
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The rate that banks pay customers on their savings investments is generally below the prime rate so that positive returns on lending activities are not canceled out.
True False
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The general population is typically healthier than the insured population.
True False
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Mortality tables and life tables are essential tools in the hands of actuaries.The actuary needs only one of the tables for making all the required calculations since one table can be derived from the other.
True False
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